Knovice- my style is American Kenpo, but some of the martial artists I work out with are Arnis practitioners. I have a lot of respect for their art, and being a sort of history buff myself I did some research. Here, for what it's worth, is some of what I know.
The Phillipines are over 7000 islands, divided into 3 main groupes (Luzon, Visayan, & Mindanao). There are over 100 known dialects spoken there, 8 major. Their culture is far from homogenous- often extremely dissimilar, and this is reflected in their fighting arts. Their arts tend to be regional in style, with more local variations. And different schools in the same area or town may have differences.The people tend to be very outgoing and friendly, and also very proud. Death matches were common between schools to prove courage, ability, and superiority- even into the 1950's. Their history and culture, and their martial arts, were shaped by contact with several cultures- most noteably early Malaysian, Chinese and Indian. Then there was the Spanish conquest (1521 to 1898) & the US occupation (1898-1904). The Japanese occupation in WW II and that war in general had more of a coalescing effect than a transfer of culture. That, coupled with advances in communication and travel, and the fact that some Phillipinos were already trying to unify their diverse arts, give us Modern Arnis. All of the histories I've read assert that there is ample evidence of the influence of these interactions altering the Phillipine fighting arts, and I guess that it only makes sense that they would. So I never questioned it (how's that for a historicaly inquireing mind?).
As for carrying shields instead of swords and knives, it also makes sense to me that most of the time they would opt for espada y daga.
1. Poor or oppressed people (they were usually both) adapt their tools to fighting. It is cheaper, and you aren't as likely to get strung up for carrying tools as if you're carrying obvious instruments of war.
2. The warriors of most cultures carried some combination of sword and knife as opposed to carrying arround a shield and sword. Ex; the Japanese katana, wakizashi, and tanto, or the Scottish claymore and sghien dhu.
3. I've been through the Phillipines- it is hot, humid, the jungles are dense, and the terrain can be very rugged. I'd choose not to carry a shield.
4. Shields don't lend themselves to the types of battles fought in this type environment. Stealth, mobility and flexability were often most important.
5. Espada y daga is extremely effective for the kind of close range fighting they favor.
I went to a seminar a while back in which one of the instructors was a visiting Phillipino (I wish I could remember his name, but he was from Professor Ernesto Presas organization). He told several stories which were informative and allowed us to get a look inside his culture. One was of a Phillipino commander in WW II who took a handfull of men up a rugged and heavily defended mountain to attack a well armed and numerically superior Japanese force. They were armed only with their espadas y dagas. It took 3 days (I think- this is from memory) of crawling through the jungle at night and burrying themselves during the day before they reached the top, where the main enemy force was. They infiltrated and attacked from inside the Japanese perimeter, and the fighting he described was in close and brutal. The guerrilla commander is said to have cut off the hand of the Japanese commander as he aimed a pistol at a Phillipino fighter, then spun in and used his knife to finish him off. The Phillipino commander was promoted to General on the spot by Gen. McArthur, who'd just had a good part of a regiment chewed up trying to capture this position.
As for their fighting sticks, or batons, there are two types. The hardwood baton is favored by Arnis, which is a little more rigid form and fights more at largo. Rattan batons are used by Escrima practioners- it is a very fluid form fought primarily at corto. Kali, as far as I know, uses only metal weaponry. And Modern Arnis is a combination of all the variations of these three. It is true that these batons are used for training, but they are serious weapons in their own right. The death matches I mentioned earlier were usually fought with solo o doble baton.
I guess I should say that this is all from memory, except I looked up the dates. And, as I said, I'm not an Escrimadore (though every once in a while someone will slip and call me a Caballero). So don't take this as gospel. But it ain't too bad for a internet forum.